Providing perspective on the economics and politics of sports business in Florida...and the Rays' campaign for a new stadium in Tampa Bay.

Tuesday, December 29, 2015

2015 in Review: Another Lost Year in Rays' Stadium Saga

2015 may go down as another lost year in the Rays' stadium saga, but baseball fans - especially in Tampa - are hoping it will be the last lost year as the franchise inches closer to finally buying a window out of its seemingly-ironclad contract with St. Petersburg.

Despite five years of editorials & columns warning that St. Pete would lose leverage if it didn't cut a deal with the Rays...they really haven't lost any. The Rays are still basically asking for the same deal they asked then-mayor Bill Foster for in 2010...and they've even sweetened it with development rights to try and win over hesitant councilmembers. Who knows how good the offer would be if the city refused to budge from its 2010 offer like the Rays have!

The ultimate question is which stadium will be announced first with funding (mostly private): the one somewhere in the Tampa Bay region or the one in Montreal at Peel Bassin next to a brand new Light Train station (Multimedia Station, corner of Nazareth and William)?

One thing is sure, Mayor Coderre and Montreal Baseball Project (and with Stephen Bronfman representing the investors?) are going to make major announcements before the end of March 2016. Too many ";)" in their tweets and in the radio interviews in the last 2-3 months.

We (fans, journalists) expect that a stadium plan will be announced in 2016 at Peel Basin with the introduction of the investors.

What Mayor Coderre said repeatedly in the last 24 months is that no stadium will be built until a formal agreement with MLB is signed to guarantee that a team will be back in Montreal with local investors (we know Stephen Bronfman is leading the group, he already sent a letter to all MLB owners explaining the process in place few months ago).

So forget the 2022 stadium scenario with no team. It not even an option. What Quebec city did with the Videotron Center is a completely different project where there was a need to have an indoor multi-functional arena/premise for shows, events, ... where there is a business case to use it without a hockey team for a period of time.

Now back to Montreal, the plan to be presented must include the site, the whole neighnourhood plan (Light Train, condos, commercial buildings, parks, new streets/bridge, ... in Griffintown), the funding of this global plan (private from investors and other private entities, public from all levels, federal, provincial and the city and other entities like CDPQ, IQ, ...). This is not a $500M plan, it will probably be 10x that amount.

Regarding the timeline (to start building this stadium and the overall project that is way more than just a stadium, we are talking $5G-$6G), it will depend on MLB for the stadium (so your guess is as good as mine) but some components of the project (other than the stadium) would probably by under construction as soon as 2017 or 2018. In fact, part of the work already started in 2014-15, it's a matter of aligning all the blocks together.

Now, regarding if the stadium will be for a new franchise or a relocation, my take is that MLB want the expansion fee from Montreal, relocating a team is not profitable for MLB. So MLB will do everything they can to keep the Rays and the A's in their market and start the expansion process before the end of Manfred's first mandate.

Excellent and well thought out points, Pat. I have to believe that expansion remains the best bet for a new team in Montreal. That being said, when left to their own devices, how much progress has been made in the Stadium Sagas in both Oakland and Tampa Bay in the last 8 years? Sure, the Rays may finally have the votes they need to even look at all sites in the Bay region, but who's going to pay for it? More importantly, who will suddenly get over their laughable reasons for not showing up to games, enough to fill the stadium on a regular basis? Frankly if what you say is true Pat, it's just nice to see that progress is possible somewhere, instead of this same old roundabout in TB.

I don't think expansion is realistic because 31 teams is an odd number....and there certainly aren't two markets worth expanding to.

Remember, every new mid- or small-market you add is more revenue sharing over time that you're syphoning from big-market teams...and that's supposedly the whole reason they're upset about Tampa Bay's situation.

So expansion isn't really an option.

As for relocation, MLB legally cannot cut a new deal to move the Rays before 2027...so we're back to my point about Montreal not announcing plans for a stadium 12 years prior to its use.

Of course Montreal need another team for expansion. And that's probably the biggest challenge for an expansion.

Calling an expansion unrealistic is probably too strong of a word. When the words expansion and internationalization are used regularly by a brand new commissionner in the first 100 days of his mandate, it set the tone.

Also, even if the Blue Jays are popular in Canada coast to coast, it's still a team from Toronto and their popularity in Quebec is mostly due to Russell Martin, Alex Anthopoulos (former GM) and Paul Beeston (former President) that is a good friend of Mayor Coderre. Alex is gone, Paul is gone, and even the Jays fans in GTA are not cheering for the new President and GM (until the Jays start winning like in 2015). So Blue Jays best days in Quebec are probably over (season 2015 will be an historic one).

Regarding the mid-markets syphoning revenue, I disagree. As long as a mid-market (not a small one) is contributing to the overall revenue, big-markets will accept to have 2 more teams. By example, in Montreal, the TV market is HUGE. Bigger than TB. Just in 2015, game #5, Rangers vs Jays, 790 000+ viewers (so divide that number by 4 to have the number of household) in French only. And we are talking about a team that is 400-500 miles away with limited media exposure. Such numbers means revenues for all teams, it means rivalry with several teams on the east coast, it means a major TV contract. And the TV market in Canada (with two major english sports channels, TSN/Bell and Sportsnet/Rogers and two french sports channels, RDS/Bell and TVA/Videotron).

If this is not the case, then why the Red Sox want to play in Montreal April 1-2, 2016, why teams are lining up to play exhibition games in Montreal for next year and the year after?

So the question now is what are the potential cities that can join Montreal in an expansion (because the magic number 32 is a must):

- Mexico: it's a long term project. Manfred was over there in 2015 to see the existing installations and promote the MLB to potential investors.

- Vancouver: this one is a long shot but considering that internationalization is priority and the west coast a major market, it must be identified as a potential city but I doubt Canada can have two teams at the same time.

-Puerto Rico: Considering that MLB played several games over there, it's a potential market that must be considered.

- Charlotte: it's a small market and even the mayor over there said that it is not a priority.

- Portland: MLB executives were over there in 2015, looking to see if there are interest for a MLB team. Once that said, this is not a project that is a priority and investors will need to be identified.

- New Jersey: a third team in NY is a possibility. Several NY investors are looking to invest in Montreal, so if a second group is lining up in Montreal, this region may be an interesting option for them. Or elsewhere.

- There are other cities across the US that contacted MLB but at this stage, we have no information that could identify one of them as a real contender. Fans thinks that their city can support a MLB team but it takes more than that.

Expansion may be more realistic than lot's of people thinks. I'm not saying it's in the works. I'm just saying that considering Montreal is a "de facto"serious candidate with a real plan, real accomplishments and real investors, a second city (or maybe two of them) will probably be identified in 2016.

I still believe that Manfred second mandate will be the one of expansion and to do so, I believe that the process (internal discussions, committee) will start before 2020 (if the Rays and the A's situations are resolved or about to be resolved). Because we all know that by 2020 (if not before), MLB will have a clear idea of the Rays project to build a new stadium and same thing for Oakland.

Ugh! Noah, no one is saying they will expand by one team. Let's try and be a little objective here. Maybe I'd believe that expansion wasn't an option if Selig were still commish, but Manfred has been very receptive to the idea. That in of itself is a huge win for any potential expansion city, not just Montreal, because Selig was more than happy to wait for his "blue ribbon committees" to drag their feet on new stadiums for years at a time. I know it's hard to believe, but just because Tampa Bay is stuck in neutral doesn't mean every other city is. Yes, the Rays need to be held to their contract, and until the right offer for them comes along, they're stuck at the Trop. I don't know why, but the fantasy that folks have about the team basically being held up by their ankles and paying every last penny if they want to leave before 2027 is laughable. Just like the in next St Pete vote, which might even pass this time, the Rays will pay to look around the Bay, but not pay a dime more than they have initially agreed to. And just maybe if they actually find a suitable, pitch perfect spot, the Rays to Montreal rumors can go away, expansion talks can begin, life goes on, and craziest of all, people might start showing up to Rays games. Though I'm skeptical of the last item there.

As for expansion cities, is there a candidate better suited than Montreal? Probably not. However, the interesting thing about Montreal, is that the current push has only been around for 4-5 years (much shorter than the Stadium Saga), and yet it has become a viable option in that relatively short amount of time. Is it not reasonable to assume that similar progress, IE investors, stadium plans, public interest, could happen in other potential cities too? Personally I'd love a team in Vancouver, but I'd say that Monterrey, Mexico is easily the next best city. Yes, they are a few years away as well, but maybe by 2020 they'd have something concrete in place. Progress is a lot easier to achieve when everyone is on the same page with a goal in mind. Maybe that would explain things in Tampa Bay too. Or we can just blame the Trop...